Concept Of Organization, Its Structures And Types

This article is about the organization, its structure and types of organizational structure.

Concept of Organization
 
The word 'organization' is derived from 'organism'. 'organism' relates with the structure of the body in which different parts or organs are integrated in such a manner that identification has become easy and possible.

                         Organization is the backbone of management, in the absence of which managers cannot perform what they have to perform. It is the foundation on which the whole structure of management is built. Organization is one of the important function of management. Strong and effective organization is needed to achieve corporate goals. Organizing involves those means, techniques, methods and procedures which help to integrate and coordinate different functions and units of the business.

Organization is a social unit or human grouping, deliberately structured for the purpose of attaining specific goals. It is used widely to mean a structure of relationship, a process, a group of people and a function of management. It is the basic function of management. By organizing a manager achieves the organization goals.



Definitions

Organization is defined by many authorities separately. They are:

A. Organization as a Structure
Organization as a structure is a not a dynamic concept. It is a structure of relationship between various positions of the organization and a framework of the structure.
Now let us have knowledge about the definition of organization given by many authorities and they are given below:

Koontz and O'Donnel- "Essentially, it is the creation and maintenance of an intentional structure of roles".

March and Simon-"Organization structure consists simply of those aspects of pattern of behavior in the organization that are relatively stable and change only slowly".

Wiliam B. Carnell-"Organization means the structure or form of an enterprise and arrangement of all parts thereof in a manner suitable for use or services.


B. Organization as a process
Organization as a process is a dynamic concept. It is the most acceptable concept of organization. As a process , organization determines, arranges, groups and assigns the activities of the enterprises to achieve the common goals.

Theo Haimann- Organization is the process of  defining and grouping the activities of the enterprise and establishing the authority relationship among them.

Mooney and Railey-" Organization is the form of every human association for the attainment of a common purpose".

Stoner, Freeman and Gilbert-"Organization is the process of arranging and allocating works, authority and resources among an organization's members so that they can achieve organizational goals."

From the above definitions, we find that an effective organization or effective organizing functions of an enterprise includes:
-Identification and classification of most essential activities.
-Grouping of the activities in such a manner that could help to achieve goals.
-Giving right or authority of supervision to the managers, and
-Arranging a provision for coordination horizontally and vertically in the organization structure.



Organizational Structure

Organizational structure is the organizational framework of an enterprise and it is designed to clarify that who is to do what tasks and who is responsible for what results. Organizational structure helps a lot in furnishing decision making and communication network reflecting and supporting the enterprise's objectives. It is a consolidated diagram of duties and responsibilities of people entrusted with different functions and jobs in the organization. It refers to the hierarchical arrangement of various positions and defines their inter-relationship.  https://bizmgnt.blogspot.com/
 
Types of Organizational Structure

Each business enterprise differs to another. Hence, organizational structure differs from enterprise to enterprise. Structural difference is found in many business organizations in connection with responsibility - authority, interactional relationship and coordination among the personnel and between the departments. It is also believed that every enterprise has to evolve its own organizational structure because each enterprise has its own nature, scale and size of business. However, there are three types of organizational structure and they are:

1.Line Organization Structure
2.Line and staff organization structure
3.Functional organizational structure


1.Line Organization Structure

It is the most oldest and simplist form of organization. This line organization structure was brought from military organization as  it was developed in the army. Under this structure, authority moves from top to bottom and responsibility steps up from bottom to top making a flow of straight line in the organizational relationships. In this form of organization, each superior is independent and takes decisions in his own area of work and each subordinate is directly responsible to one executive. It is very simple organization structure. It is so simple that it can be defined and understood by all the members of the enterprise .Another benefits of this organizational structure is that the managers take very prompt and quick decision. Similarly, it is less expensive and comparatively economical form of organization from the view point of overhead cost because it does not employ or hire the experts and specialists.

Types/Forms of Line Organization
This oldest and simplest form of organization may be classified into two groups, namely
a)Pure line organization  and  b)Departmental line organization

a)Pure line organization; In pure line organization, the activities at any one level are same and all individual perform same type of work. The individuals are divided into groups only for the sake of effective control and supervision.

b)Departmental line organization; In departmental line organization, an organization is broadly divided into departments. Each department is under the control of departmental manager. In each department the head takes responsibility of performance and he is answerable and accountable to the senior.

2. Line and Staff Organization Structure

                                        Line and staff organization is the second form of organization which is the result of the growth of business activities. It is found that in a large organization, the conventional and traditional approach cannot function. That a few executives cannot perform all the business and managerial activities themselves and thus they needed the help and assistance from the specialists in various areas.

In a line and staff organization, the works are divided into broad divisions: the line maintains discipline and stability for the actual execution of the work and the staff is responsible for providing expert knowledge. Under this type there is a direct line authority as in line organization and specialists are attached to the line managers to advice them on important matters. Thus, staff relationship is purely advisory.  This type of organization is based on planned functional specialization. Line and staff organization has made it possible to take sound decisions with the help of reliable information and valuable advice of the staff experts. But this form of organization is relatively expensive. Similarly, it is experienced by many that the advices of staff experts are ignored by the line authority assuming they are not practical.
            


3.Functional Organizational Structure

                                       It is the most logical and basic form of business organization which is structured on the basis of departmentation.  Functional organizational structure helps to bring all the

staff members together in one activity or several related activities of one departments. For example, an organization divided by function might have separate manufacturing, marketing, finance and human resource department.
This form was developed by F.W. Taylor. At the time of development of Scientific Management Theory, he propounded the concept of functional foremanship, in which he opined that a foreman cannot be specialist in everything and cannot perform the total activities of varied nature. He suggested the enterprises to divide the entire work of organization into eight major functions - four in planning function and four in execution functions.

In functional organization, functional foremanship is practiced due to which division of labor is successfully ensured. This form of organization helps the enterprise to increase the efficiency of subordinates. Under it, the subordinate gets advice and directions immediately from specialists. It facilitates large scale or mass production through  specialization in work and operation.
But in this type of form, there is delay in decision making because many experts are to be consulted. Many specialists are required to perform varied function. Thus, this form of organization is too expensive. Similarly, due to excessive authority, the authorities may disagree to each other and thus conflict may arise and coordination among them cannot be established.

If your find this article helpful then please let me know through comment and if you want any other information related to this topic then please comment. And also you can visit my https://bizmgnt.blogspot.com/ to know more about related topic.